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MEXICO 

TODAY 



■V' 

As Seen By Our Representative 

On A Hurried Trip Completed 

October 30, 1920 



THE AMERICAN EXCHANGE 
NATIONAL BANK 

128 Broadway New York City 



REPORT OF TRIP THROUGH MEXICO 

WITH MEMBERS OF CHAMBER 

OF COMMERCE OF HOUSTON, 

TEXAS— OCTOBER 7-30, 1920. 

By W. H, MosELEY, Jr. 



The American Exchange National Bank, 

New York City. 
Gentlemen : 

Under the supervision of Mr. D. D. 
Peden, President, The Houston Chamber 
of Commerce, and Mr. T. L. Evans, Mana- 
ger of its Foreign Trade Department, an 
organized Trade Excursion through the 
principal cities of Mexico was accomplished. 
The purpose was to get a "first hand" idea 
of general conditions and to further in 
every possible way the re-establishment of 
commercial relations which have been prac- 
tically suspended during the ten-year period 
of revolution. It was further desired to 
show the Mexican people that the feeling of 
the American Nation was one of friendship 
and kindly interest and that we were glad 
to see their country return to peace and 
prosperity and anxious to witness the re- 
sumption of International commerce. 

The trip was capably managed and the 
entire program carried out as originally 
planned. Through the courtesy of the 
Mexican Government our special train was 
met at the International border at Nuevo 
Laredo by Mr. Santa Marino, Assistant 
Passenger Agent of the Nacionales de Mex- 
ico (Mexican National Railways), who took 
charge and made the trip with us. The 
Mexican Government hauled our train free 
of charge while in the Republic. I have 
never seen a train run on better schedule 
time. 

The Mexican Consul at Galveston, Mr. E. 
Meade Fierros, was also commissioned by 
his Government to make the trip with us 
and rendered very valuable assistance. 

I shall endeavor to cover the conditions 
and things of interest regarding different 



MEXICO TODAY 



places in which we stopped in the order of 
our arrival and at the end of this report 
will make a resume of political, financial, 
industrial and general conditions in Mexico 
today. 

LAREDO, TEXAS 

We left Houston on the evening of Octo- 
ber 7th and arrived at Laredo on the Ameri- 
can side the next morning. We were met by 
the Laredo Chamber of Commerce and 
given a very interesting ride over the city. 
I called on the local bankers, who expressed 
the opinion that the Mexican political trou- 
bles were over and predicted an unprece- 
dented era of prosperity for Mexico. They 
were very optimistic over the outlook for 
Laredo, as this city will undoubtedly be the 
gateway for a large share of export and im- 
port commercial dealings with Mexico. I 
had a particularly interesting talk with Mr. 
Miles T. Cogley, President of the Milmo 
National Bank of Laredo and also Presi- 
dent of the Texas-Mexican Railway. He 
told me that one of the main things needed 
in Mexico now was for American railroad 
lines to allow their freight cars to go over 
into Mexico without requiring the Mexican 
merchants to give a heavy bond against 
the cars' safe return. He thinks this will 
be done soon, as the Pullman Company has 
investigated conditions and began sending 
its cars across to all the principal points 
in Mexico on the 15th of October, so that 
now one can travel in comparative comfort 
there. Another pressing need mentioned 
by Mr. Cogley was the building of a rail- 
way line from Houston direct to Laredo. 
This is being actively discussed by commer- 
cial organizations all along the proposed 
route. 

MONTEREY, MEXICO 

We crossed the Mexican border about 
one o'clock en route for Monterey, our first 
stop in Mexico, arriving there about seven- 
thirty, and were met by a large delegation 
of Mexican business men and representa- 
tives of the Chamber of Commerce. We 



MEXICO TODAY 



were taken to the Foreign Club, where a 
smoker was given and a number of speeches 
made. All were very much impressed by 
the sincere expressions of good will for the 
United States and the expressed desire to 
do business with our merchants and manu- 
facturers. We began there to revise our 
opinion that the Mexican people fostered a 
dislike for Americans. This idea was 
largely due to incorrect and exaggerated 
items which have been published from time 
to time in the Press of both countries. 

The following day we were taken for a 
visit to the principal industries and places 
of interest. It was the party's first trip 
through a typically Mexican city and we 
were agreeably surprised to find on every 
hand evidences of work and industry. 
There were practically no signs of revolu- 
tion or warfare. The street cars were run- 
ning, factories, foundries and mines in full 
operation and their stores all open and ap- 
parently doing a brisk business. We visited 
what is probably the largest single plant 
here, the Compania Fundidora de Fierro y 
Acero de Monterey, S. A. It has a capital 
of ten million dollars and carries an ac- 
count with a prominent New York bank. 
In this plant they are very busy making a 
number of products, including bolts, nuts, 
pipe, steel railroad rails, car wheels, special 
castings for school desks, etc., and also re- 
building railroad locomotives, many of 
which were practically wrecked during the 
revolution. This plant was formerly 
operated by American labor, but now it is 
run almost entirely by Mexican labor. The 
skill displayed by some of these men at the. 
furnaces and in the rolling mill is of the 
highest standard. The company employs 
over 2,000 people in this plant and the 
wages run from 2^ pesos ($1.25) for com- 
mon labor to 10 to 12 pesos ($5 to $6) for 
skilled labor per day. In the nut and bolt 
I department we found boys and girls of 13 
i to 18 years of age operating some of the 
I machines. There is a crying demand in 
I Mexico for all of the company's products. It 
I works three eight-hour shifts, using fuel oil 



MEXICO TODAY 



from Tampico and coal from Coahuila. 
Its plant covers a very large area. 

There is also a silver and gold smelter 
close by, which was organized by Mexicans 
originally, but which I was told has re- 
cently been purchased by American inter- 
ests. Here there is also one of the largest 
breweries in Mexico, where the famous 
"Carta Blanca" beer is made. This is one 
of the leading industries of Mexico and this 
particular brewery is reported to be making 
immense profits. We also visited a glass 
factory, where their main product is bottles 
and drinking glasses. There is also a rope 
factory here. 

A Canadian concern owns the street rail- 
way and the water system, which is said to 
be one of the finest in the Republic. There 
are several private banks here. The Banco 
Nacional de Mexico, which was formerly 
the strongest bank in Mexico, has been 
closed during the past trouble and the only 
banks in Mexico now are private banks. 

Mr. Adolfo Zambrano, Jr., of the bank- 
ing firm of A. Zambrano e Hijos was par- 
ticularly courteous to me and gave me very 
valuable information about banking condi- 
tions in Mexico. His bank is establishing 
branches in the principal cities of Mexico 
and their deposits are said to be increasing 
very rapidly. They have modern banking 
methods. Burroughs statement system and 
beautiful fixtures. They open credits in 
New York for their Mexican customers who 
are buying goods in the States. These banks . 
are allowed interest on their daily balances ; 
by their New York correspondents. Their • 
foreign exchange service involves daily ' 
telegraphic communication with New 
York. They also maintain balances with 
Texas border banks. For commercial loans 
to their customers they charge an average 
of 18 per cent per annum. The reason for 
this seemingly high rate of interest will be 
dealt with later. Mr. Zambrano said the 
crying need of his country was for finan- 
cial assistance from the banks of the United 
States. He seemed anxious to have Ameri- 
can banks enter the Mexican field and said < 



MEXICO TODAY 



they could do so with perfect safety and 
that the returns would be entirely satis- 
factory. 

Monterey is primarily a mining city; the 
farming situation is not very promising. 
The land is very dry and hard and nothing 
seems to grow except several species of 
cactus. It is claimed that when irrigated 
it is very productive, but that step seems 
quite a long Avay off. The population of 
Monterey is approximately 85,000 and it is 
the capital of the State of Nuevo Leon. 

TAMPICO 

We left Monterey on the evening of Oc- 
tober 10th and arrived in Tampico the 
morning of the 11th. We had heard won- 
derful stories of the great Tampico oil 
fields and having visited most of onr Texas 
and Oklahoma oil fields I thought I 
knew what to expect, but the operations 
in that field were so stupendous that I was 
very much awed at the magnitude of things. 
As we approached Tampico, for several 
miles along the Panuco River we saw a 
solid line of wharves, refineries and oil 
tankers on both sides of the river, and on 
the higher ground back from the river was 
an almost endless row of large storage 
tanks. We arrived at the station to find 
it a long, low, dilapidated shack and piled 
high with all kinds of freight, etc. It all 
seemed confusion. This same condition is 
seen at the Customs House and is one of 
the most serious drawbacks to the mer- 
chants and oil companies of Tampico. There 
is such a large quantity of freight and sup- 
plies handled through the port of Tampico. 
that it is simply swamped. They are try- 
ing, however, to enlarge their facilities and 
hope to remedy this situation. Of course, 
the chief reason for Tampico's commercial 
status is oil and from a standpoint of com- 
mercial importance Tampico now ranks as 
high, if not higher, than any other Mexican 
city. The transportation facilities by water 
into Tampico and the railroads into the 
interior make it fairly certain that Tampico 
will always be a prominent commercial cen- 



MEXICO TODAY 



ter, even though the oil fields are exhausted. 
I am taking the liberty here of inserting an 
excerpt from a letter written me by a gen- 
tleman whom I met in Tampico and who 
has lived there for about six years, appears 
to know the conditions well, speaks the 
language fluently and has apparently made 
quite a success of his operations. He 
writes in part as follows: 

"This is the first time since the overthrow of 
Diaz that all the various factions here in Mexico 
have been united and working in perfect harmony. 
The Mexicans are sick and tired of fighting and 
they are demonstrating their honest desire to go 
to work and assist in establishing a permanent 
government and restore normal conditions in 
Mexico. General Alvaro Obregon, president-elect 
of Mexico, is a broad-minded, progressive man, 
and everybody seems to be of the opinion that 
he is THE ONE man to establish a firm govern- 
ment along substantial, progressive, conservative 
and unselfish lines. Furthermore, General Obre- 
gon and all his followers very clearly realize that 
in order to establish and maintain such a govern- 
ment in Mexico, they must have the moral and 
financial support of the United States and they 
are constantly showing a most pronounced de- 
sire to create a better feeling between Mexico 
and the United States and to extend ample pro- 
tection and guarantees to both life and property 
of foreigners and encourage the investment of 
foreign capital in Mexico to assist in the develop- 
ment of the wonderful resources of this country. 
In other words, the Mexicans are sick and tired 
of fruitless revolutions and the officials are really 
honestly and unselfishly laboring to establish a 
firm and permanent government along broad con- 
structive lines and regain for Mexico the position 
of honor and respect which she once enjoyed 
among the nations of the world. All of which 
means that the future political outlook for Mex- 
ico is more encouraging than it has been for ten 
years. 

"Tampico occupies a very peculiarly unique 
position as compared with other cities of Mexico; 
in fact, she is absolutely independent of the rest 
of the Republic. She has, of course, the greatest 
oil field the world has ever known and the con- 
sensus of opinion of the leading oil men is that 
this field has merely been scratched from a stand- 
point of development and they estimate the life 
of this field to continue at least ten years yet. 
A casual observation of the enormous investments 
in refineries, terminals, wharfs, tank farms, pipe 
lines, tank steamers, office buildings and resi- 
dences by the oil companies on such an elaborate 
and permanent basis, will immediately convince 
one of the confidence the oil companies have in 
the future of this field. Apart from the oil indus- 



MEXICO TODAY 



try, the commercial importance of Tampico is 
very great. She has one of the finest natural har- 
bors on the American continent; the geographical 
location of Tampico makes her the most logical 
point through which all imports and exports to 
and from all central and northeastern Mexico will 
pass; Tampico is surrounded on three sides by 
as fertile agricultural land as can be found on the 
American continent. All kinds of tropical and 
semi-tropical fruits and vegetables grow in abund- 
ance the year round; sugar cane, coffee, rice, 
tobacco, vanilla beans, corn and beans yield boun- 
teously in this region; the sisal industry has just 
begun to be developed on a big scale in this 
state and is proving to be of better quality and 
more profitable than is obtained in Yucatan; cat- 
tle and live-stock of all kinds thrive exceedingly 
well here; there is an enormous quantity of hard 
wood timber along this coast; the fishing industry 
offers wonderful opportunities; the winter climate 
is most agreeable, and the great quantity of wild 
game such as small black bear, tiger, turkey, 
geese, duck and also fish, offer attractive induce- 
ments to men who like this kind of sport. 

"With all these resources and with transporta- 
tion facilities to all parts of the world, and the 
fact that most all products shipped to and from 
the Central and Northeastern section of Mexico 
will have to pass through here, it seems inevitable 
that Tampico will soon develop into a very im- 
portant manufacturing, industrial and shipping 
center, because with a few years of peace in Mex- 
ico, these resources must be developed. 

"However, eliminating the future possibilities, 
Tampico, with her 100,000 inhabitants, is at pres- 
ent a rapidly growing, thriving, progressive, busy 
city with American ideas and principles predomi- 
nating. And, furthermore, just so long as there 
is a barrel of oil to be had from this field, it 
doesn't matter what the conditions might be in 
other parts of Mexico nor who is president of the 
United States, the world must have this oil, 
which means that Tampico will continue to enjoy 
unmolested prosperity." 

There are at present two principal oil fields 
near Tampico, viz: the Panuco field and 
the South Coastal field which lies south 
of Tampico in the State of Vera Cruz. We 
made a trip through the Coastal field and 
saw some of those wonderful wells that 
have been producing enormous quantities 
of oil for so long a time. They are still 
bringing in new wells and extending the 
field. The outlook seems very promising. 
The wells come in at a depth of around 
3,000 feet. Nearly all of the larger oil com- 
panies in the State have holdings there. 



MEXICO TODAY 



The British companies are very strong. 
The Corona Oil Company is controlled by 
the Royal Dutch-Shell interests and the 
Mexican Eagle (Compania Mexicana de Pe- 
troleo "El Aguila"), which was the Lord 
Cowdray Company, is also managed and 
controlled by the Royal Dutch-Shell inter- 
ests. 

Tampico has a population of around 100,- 
000 and there are about 8,000 Americans in 
and around the city. The payrolls of the 
oil companies amount to three million dol- 
lars per month. From a business stand- 
point, Tampico reflects possibly more than 
any other Mexican city the up-to-date ideas 
and methods brought there by Americans 
and other foreigners. There is an enormous 
amount of foreign capital invested here in 
connection with the oil industry. The resi- 
dential addition to the city, known as the 
Aguila Colony, where most foreigners live, 
has a pretty location and has some really 
beautiful homes. The cost of the average 
cottage in this section is around $15,000 gold. 
Tampico is growing very rapidly and is 
very crowded. It is difficult to get hotel 
and living accommodations and at night 
certain streets are filled with native families 
sleeping out in the open. The climate is 
hot and Tampico has the reputation of be- 
ing very unhealthful for foreigners, but they 
are clearing away the underbrush near the 
city, fighting mosquitoes and already con- 
ditions are much improved. Before we ar- 
rived in Tampico, both the American and 
Mexican newspapers printed reports of an 
epidemic of yellow fever there, but we found 
this untrue. The authorities told us that 
there was only one case in the city and that 
it was recovering. They have some very 
live business organizations whi^h are work- 
ing together for the commercial growth of 
the city. The Mexican Chamber of Com- 
merce, the American Chamber of Commerce 
and the Foreign Club are all very industri- 
ous bodies. There are apparently great op- 
portunities in this city for new enterprises. 
For example, they need a telephone system. 
There is only a semblance of a system, 

8 



MEXICO TODAY 



which is owned by Germans. There are 
only a few telephones in the city and the 
people get practically no service. Further, 
they do not have natural gas distribution 
through the city, when within a few miles 
one well, belonging to the Texas Company, 
is discharging as a total loss 55 million cubic 
feet of gas per day and another, owned by 
the American Fuel Oil Company of Cleve- 
land, is letting go to waste 29 million cubic 
feet daily. What are apparently wonderful 
opportunities for money making stare at 
one from every side and the people who live 
there all say that their crying need is for 
capital to develop their natural resources. 
The agricultural possibilities around Tam- 
pico are very inviting. It is' a tropical re- 
gion and the land is very rich. All kinds 
of tropical farming is carried on with great 
success. The local merchants, both native 
and foreign, say they are greatly handi- 
capped by the lack of banking facilities and 
they are extremely anxious for our American 
banks to come in and do business with 
them. Among the main banks there are 
the Tampico Banking Company, S. A., The 
Petroleum Banking & Trust Company, S. A., 
and a branch of the Banque Francaise du 
Mexique, which has its head office in Mexico 
City and was formerly called Lacaud e Hijo 
(Lacaud & Son). The big oil companies do 
not carry large balances in Tampico as they 
maintain their major accounts in the States. 
The local banks open credits with their New 
York and border bank correspondents in 
favor of their local customers. What they 
say they need is to have large banking in- 
stitutions that will advance credit for the 
opening of documentary Letters of Credit in 
favor of approved Mexican merchants, which 
credit the local bank would usually guar- 
antee. This would finance the operation of 
buying goods during the period of shipment 
to Mexico, which consumes ordinarily from 
thirty to sixty days, and would solve a great 
problem for both the Mexican merchant and 
the local banks. In order to perfect an ar- 
rangement of this nature, it would be nec- 
essary for the New York bank to have some 
one on the ground to check the credit of the 



MEXICO TODAY 



concerns it proposed doing business with 
and also to have a close connection with 
a local bank in which it had confidence, 
which bank could look after the payment of 
documents on arrival of the goods. Of 
course there are certain well-rated firms in 
Mexico who prefer having an established 
line of credit and carrying an open account 
with a New York bank, exactly as business 
houses in the States do. For any credit 
accommodations extended to Mexican com- 
mercial houses a very attractive rate of 
interest could be obtained. The straight 
loans which are made by the Tampico banks 
to their customers bear an exceptionally 
high rate of interest, some loans being re- 
ported on a basis of 24 to 36 per cent in- 
terest rate. The demand is great for money 
here and these high interest rates do not 
indicate that there is an undue element of 
chance taken, as the best-rated concerns pay 
these rates. 

SAN LUIS POTOSI 

Our train left Tampico at noon on the 
14th for San Luis Potosi. The country is 
very pretty between these cities. One first 
passes through the tropical section and then 
when the climb up the mountain begins it 
is beautiful indeed. The mountains in this 
section are different from the mountains in 
North Central Mexico, being covered with 
foliage, and have not the barren surface of 
those of the interior. The railroad up these 
mountains is a wonderful bit of engineering 
as it traverses a very irregular country. We 
arrived in San Luis Potosi the morning of 
the 15th. It is a city of 60,000 to 70,000 
population and is noted over Mexico for its 
beauty and cleanliness. It has numerous 
plazas and cathedrals and its streets are 
kept spotlessly clean. We were met by the 
Mexican Chamber of Commerce and given 
a ride over the city, after which we were 
entertained at a luncheon at the Chamber 
of Commerce Building. A number of 
speeches were made and we were again im- 
pressed by the earnestness of the Mexican 
business men in their desire to establish com- 
mercial relations with the United States. I 

10 



MEXICO TODAY 



called on the Zambrano e Hijo Bank and 
the Banque Francaise du Mexique. 

The interests of San Luis Potosi are 
mainly agricultural, but there are some valu- 
able salt mines nearby. Much of the land 
around this city is under irrigation and 
the crops were very fine indeed. There is 
a very apparent lack of up-to-date farming 
implements and modern pumps for irriga- 
tion, and one sees crude home-made plows 
on every side and queer mule-power contriv- 
ances being used for pumps to raise the 
water into the irrigation ditches. Mexico 
certainly needs farming machinery badly 
and presents a wide field for any of our 
implement houses who will seek business 
there. The stores of the city appeared to 
be well-stocked and doing a good business. 
We also noticed quite a lot of building and 
construction going on. 

In the evening we were entertained at 
a banquet by the governor of the State of 
San Luis Potosi, who repeated the desire 
expressed by the merchants for closer com- 
mercial relations and promised adequate pro- 
tection to Americans who wished to either 
live in Mexico or make investments there. 

QUERETARO 

We left San Luis Potosi the night of the 
15th and arrived in Queretaro the morning 
of the 16th. 

Queretaro is very prominent in Mexican 
history, as it has several times been the loca- 
tion of the Government when, under stress, 
it had to flee from Mexico City. It was also 
the scene of Maximilian's capture and exe- 
cution. The Austrian Government has erect- 
ed a chapel over the spot where he was 
executed and once a year sends priests to 
hold memorial services. Maximilian, with- 
out doubt, did more toward bringing civili- 
zation and art to Mexico than anyone else 
and traces of this are to be noted in all parts 
of the country. Mexico is famed for its 
palatial government buildings and palaces 
and Maximilian was largely responsible for 
these. Queretaro is one of the oldest cities 

11 



MEXICO TODAY 



of Mexico and has many very beautiful 
cathedrals. 

MEXICO CITY 

From Queretaro we went to Mexico City, 
arriving- there Saturday evening, October 
16th. We were furnished accommodations 
at the Regis Hotel during our stay of six 
days. We had Sunday to rest and go sight- 
seeing. Mexico City is one of the most 
beautiful and picturesque cities on the 
American continent. It has numbers of very 
handsome government buildings, cathedrals, 
palatial residences, modern office buildings, 
etc. It has the air of an American city in 
the streets and in the business section, the 
streets of which are well laid out, paved and 
lighted. It is noted for its beautiful boule- 
vards, drives and places of interest, chief 
among which are the castle and grounds of 
Chapultepec, Xochimilco and its floating 
gardens, and Popocatepetl. It has an alti- 
tude of over 9,000 feet and the climate is 
cool and delightful. There are many for- 
eigners there. Before their recent revolu- 
tions there were large numbers of Ameri- 
cans there, but most of them left, though 
they are beginning to return now. I am 
told that Americans were never really mo- 
lested in Mexico City and the attitude of 
the Mexicans now is certainly very friendly. 

Monday we were given a luncheon by the 
Mexican Chamber of Commerce of Mexico 
City in its building, at which were present a 
number of El Paso, Texas, business men 
who were touring Mexico for the same pur- 
pose we were. The president of the Cham- 
ber of Commerce made a very forceful 
address in which he stated that the 
percentage of failures of merchants in Mex- 
ico was smaller than in any other country. 
He especially urged American banks to come 
into Mexico and assured them they would 
have every assistance possible and complete 
protection. He did not see the wisdom of 
America lending money to Europe and help- 
ing them when our next-door neighbor, Mex- 
ico, needed help so badly, especially when 
those same Europeans, he said, used that 

12 



MEXICO TODAY 



money to come over into Mexico and com- 
pete with us. He stated that several Eu- 
ropean countries were already beginning to 
exploit the Mexican trade fields and urged 
us to come in before it was too late. He 
regretted the fact that American mer- 
chants and manufacturers did not give more 
attention to Mexican business and to the 
shipping and packing of goods for export 
to Mexico. He also urged our merchants 
and manufacturers to give reasonable credit 
terms to Mexicans and said they would re- 
ceive us with open arms if we would only 
come in. There are 5,000 Mexican merchants 
in Mexico City who are members of the 
Chamber of Commerce, and he says these 
concerns will meet their credit obligations 
as readily as any class of business men in 
the world. They need our help to develop 
Mexico's wonderful natural resources. He 
ended by again saying that Americans need 
have no fear about coming to Mexico and 
investing their capital, and stated that the 
Mexico City Chamber of Commerce stood 
ready to help in every way possible any 
one who wished to enter this field. 

The next day our party was presented to 
Provisional President de la Huerta. We 
were first shown through the National Pal- 
ace, which is a marvel of luxury and ele- 
gance. There are numbers of large recep- 
tion rooms, ante-chambers, cabinet rooms 
and private offices, all exquisitely appointed 
with the most expensive and artistic fur- 
nishings imaginable. When we had finished 
our visit through the Palace we then met 
President Adolfo de la Huerta, who at once 
impresses one as being very capable and 
resourceful, and although he has a very quiet 
bearing and manner of speech you somehow 
get the impression that he has a very strong 
will and the nerve to back up his convic- 
tions. He is a young looking man, appar- 
ently about 43 or 44. There can be no 
denying that since he has been in office he 
has worked wonders in his country. Sta- 
tistics show that the efficiency of the rail- 
roads has increased over 30 per cent during 
his incumbency. For the first time in ten 

13 



MEXICO TODAY 



years there are today no armed factions 
opposing the Government and everyone 
seems to realize how much better off they 
are under the new order of things and seems 
to want to aid the present Government in 
every way possible. President de la Huerta 
is very popular throughout Mexico. He will 
return to his former position as Governor 
of Sonora when President-elect Alvaro 
Obregon takes office next month. President 
de la Huerta made an address in which he 
stated that the present Government was 
absolutely stable. He said numerous strikes 
had been amicably settled, that factories and 
industries were re-opening and people re- 
turning to productive work, and that during 
his regime no foreign capital had been mo- 
lested ; further, that wages in Mexico had 
not advanced since 1912 and consequently 
the laboring Mexican found it hard to meet 
the high cost of living, but he felt con- 
fident that as soon as the country got on a 
more productive basis this matter would be 
remedied. He is very anxious for Ameri- 
cans to enter Mexico. He says there is 
room for all and guarantees complete pro- 
tection to Americans and their enterprises. 
He is giving attention to schools and says 
he realizes that through education of the 
lower classes there will be brought about 
a better understanding of the principles of 
liberty and justice as we have them in our 
country and this will absolutely do away 
with internal revolutions. The President 
impressed everyone present as being very 
sincere in his desire to be of service to his 
country and to establish closer relations 
with the United vStates. He also referred 
to our Government and said that he hoped 
we would not defer recognition of the Mexi- 
can Government long as it would greatly 
help them in getting their country on its 
feet to have our help and support. 

I called on General Salvador Alvarado, 
the Minister of Finance of Mexico while I 
was in the city. Not having arranged pre- 
viously for an audience with him I was told 
by friends familiar with the circumstances 
that it was very unlikely that I would be 

14 



MEXICO TODAY 



able to see the General as he was probably 
the busiest man in Mexico. When I ar- 
rived at the National Palace and was shown 
the Treasury Department I felt sure that 
this prediction was true as there were sev- 
eral ante-rooms filled with people waiting 
for an audience, but immediately upon pre- 
senting my card bearing the name of The 
American Exchange National Bank, New 
York, I was admitted to General Alvarado's 
office. Some of the people outside had been 
waiting several days for an interview with 
the General. He recalled with great pleasure 
the courtesies extended him by our bank 
while he was in New York. He especially 
asked to be remembered to our president, 
Mr. Lewis L. Clarke, and our other officers. 
General Alvarado told me that Mexico's 
future looked particularly bright now; that 
everyone seemed to earnestly desire peace. 
He said that from a financial standpoint 
each day showed improvement. The rail- 
roads are rapidly restoring their service and 
the revenue therefrom is correspondingly 
larger. The rolling stock is being rapidly 
repaired and put into service. He also men- 
tioned the great need of Mexico for outside 
financial help and said that he would render 
any assistance within his power to our bank 
or any other bank that would enter the 
Mexican field. He said there was room for 
many new banks in the country. He 
was exceptionally cordial and courteous to 
me and offered to assist me in any way he 
could during my stay in Mexico. 

I had a very interesting visit with Mr. 
Edwin W. Sours, general agent for R. G. 
Dun & Company in Mexico. Mr. Sours told 
me that credit conditions were much better 
in Mexico than Americans thought. He 
said his organization had very complete 
credit files on the Mexican houses and that 
the average Mexican business man was 
prompt in meeting his obligations. He said 
that prospects were very encouraging and 
that there appeared to be an unprecedented 
era of prosperity before Mexico. While 
there are branches of two or three European 
and Canadian banks in Mexico City, and 

15 



MEXICO TODAY 



several private banks, it would appear that 
here, as in other cities of Mexico, there is 
a need for greater banking facilities. 

During our stay we were shown every 
consideration and courtesy by both the Fed- 
eral and municipal authorities and met sev- 
eral of the cabinet ministers and the mayor. 
We were shown the principal places of 
interest and given several banquets and re- 
ceptions. Mexico City presents today the 
unmistakable signs of renewed commercial 
activity and the merchants are looking for- 
ward to peace and prosperity and making 
their plans accordingly. Many of them are 
seeking to handle the lines of American 
houses in Mexico. One noticeable feature 
in Mexico City is the very large number of 
automobiles. Most of them are American 
cars, with a few European makes. 

GUADALAJARA 

After our six-day stay in the city we 
left on October 22nd for Guadalajara and 
arrived there the morning of the 23rd. 
Guadalajara is the second largest city in 
Mexico and is very pretty. It is situated in 
a fine agricultural section on the Pacific 
slope and has mining enterprises of con- 
siderable importance nearby. The section 
of the city known as the Foreign Colony con- 
tains many beautiful homes of American and 
European architecture. Before the revolu- 
tion there were large colonies of Americans, 
English, French and Germans, but many 
Americans and English left. There are large 
numbers of Germans who make their home 
here. Most of the leading stores are owned 
by them and they handle German goods al- 
most exclusively and advertise them exten- 
sively. 

The merchants of Guadalajara seemed 
to be handicapped by the lack of adequate 
banking facilities. There are several small 
private banks here, but they are not large 
enough to furnish sufficient credit to the 
commercial houses and really specialize on 
their foreign exchange trading. 

Unskilled labor around Guadalajara is 
16 



MEXICO TODAY 



paid one peso (50c gold) per day and car- 
penters, masons, blacksmiths, etc., earn two 
pesos, or $1.00 gold, per day. Guadalajara 
would seem to be an ideal place for factory 
sites, as it has an abundance of cheap 
electric power generated by the enormous 
water falls nearby. Only about 5,000 H. P. 
of this is used at present and it is estimat- 
ed that 300,000 H. P. is daily going to waste. 
The Southern Pacific Railroad has its ter- 
minal in Guadalajara, and as soon as it 
completes about 125 miles of track, on 
which it is now working, will have a direct 
line from Los Angeles to Guadalajara, 
which will open a very rich section of coun- 
try along the Pacific Coast. 

There are some very beautiful places of 
interest around Guadalajara, chief among 
which is Lake Chapala, which is a very 
large lake, situated among the mountains. 
Guadalajara has an altitude of some 5,000 
feet and is noted for its even and delight- 
ful climate. It is claimed the sun shines 365 
days every year. There is a very fine 
waterworks system. The population is es- 
timated at around 200,000, although there 
appears to be no accurate census. 

LEON AND AGUASCALIENTES 

From Guadalajara we started our north- 
bound trip, leaving there on October 26th. 
We stopped a few hours at the City of 
Leon, which has a population of about 30 
to 40 thousand. It is a typical Mexican 
city. We went on to Aguascalientes, ar- 
riving there in the afternoon and spent sev- 
eral hours. It is the capital of the State of 
Aguascalientes, and noted for its hot baths. 

TORREON 

We left Aguascalientes the night of the 
26th and arrived at Torreon on the morn- 
ing of the 27th. We were met by the local 
Chamber of Commerce and taken for a ride 
over the city. The principal industries of 
this section are mining, cotton and guayule. 
There are several large mines and smelters 
located here, and there are also cotton mills. 
In this section they raise large quantities of 

17 



MEXICO TODAY 



cotton, which is of a very high grade. They 
produce the famous "Imperial Valley" 
staple. While we were in Torreon I talked 
with several cotton men, who told me that 
cotton was then selling at 24c per pound 
when the same grade in the States was 
selling at 19c. They said some Texas cot- 
ton was being imported by their mills at 
that time. We visited the smelters and 
were then taken to the guayule factory. 
Guayule is a low grade rubber which is 
used as a filler and in the manufacture of 
belting, etc. It comes from a plant which 
resembles a weed and grows wild and in 
great quantities all over the surrounding 
country. This rubber is partially refined in 
Torreon and then shipped to the States. 
Most of the large interests are owned by 
American capital. 

They were having a very hot political 
campaign between the conservatives, who 
styled themselves the ''Black and Red" 
party, and the socialists or radicals, who 
called their party the "Reds." It was the 
opinion that the conservatives would win 
easily. There have been labor agitators at 
work in this section, and they have caused 
quite a bit of industrial strife. The main 
labor trouble, however, is among the coal 
miners of the State, and since leaving Mex- 
ico I have seen in the papers that the Gov- 
ernment has taken over the mines of Coa- 
huila and is operating them, claiming that 
the coal is essential for the railroads and 
other important enterprises. The Govern- 
ment states that this is not confiscation and 
that the mine owners will receive their le- 
gitimate profit. 

SALTILLO 

Leaving Torreon on the night of the 
28th we arrived in Saltillo the morning of 
the 29th. Saltillo is a very progressive city, 
having as its main industry mines which 
produce gold, silver, lead, zinc, coal, etc., 
in great quantities. There are a number of 
both American and European mining inter- 
ests here. Saltillo is a very pretty city and 
is noted for its schools, chief among which 

18 



MEXICO TOl)AY 



is the State Normal School for Teachers. 
This school occupies a very handsome build- 
ing and its methods are very modern. It 
compares favorably with our schools. They 
take the small children of the kindergarten 
age and give them all necessary courses in 
this one school until they graduate as 
teachers. They give considerable atten- 
tion to the physical side of the child's de- 
velopment and are introducing all the 
American games and sports which our 
children play. The pupils are exceptionally 
clean and well dressed. A program was 
rendered by the school children which 
would reflect credit on any school. Educa- 
tion is one of the crying needs of Mexico 
today and such schools as this will do more 
than any other agency to take the idea of 
revolution and banditry out of their heads 
and instil in its place the values of indus- 
try and peace. We were tendered a ban- 
quet by the local Chamber of Commerce 
and the president of this organization, Mr. 
F. E. Salas, who is also the manager of the 
International Ore and Smelting Company, 
made a very forceful address, in which he 
stressed the importance of the American 
merchant and manufacturer giving more at- 
tention to Mexican business and studying 
conditions. Mr. C. A. Baumbach, also a 
member of the Chamber of Commerce, made 
a very ardent appeal to American merchants 
and manufacturers to give more attention 
to Mexico, stating that representatives of 
European houses were already coming in 
rapidly increasing numbers. He said we 
should teach our salesmen the customs and 
language of the country and give to Mexi- 
can customers certain credit accommoda- 
tion. He stated that before the world war 
the European merchants had given Mexi- 
cans long time credits. When the war 
broke out, however, and they were unable to 
supply their Mexican trade the Mexican 
merchant had to turn to the United States 
for his goods and the opportunity was then 
presented for us to absolutely establish our- 
selves and dominate the Mexican trade 
field in the future. However, instead of 
taking advantage of the situation we did 
19 



MEXICO TODAY 



not seem to care and when the Mexican 
was forced to come to us we demanded 
"Cash with Order" and even then our 
goods were badly packed and in many- 
cases were of very inferior workmanship. He 
stated that he was speaking thus frankly 
because unless we realized the situation at 
once it would be too late, as the Europeans 
were already back in Mexico offering to 
sell goods on credit. He said that the 
credit situation in Mexico was very good 
and that the Dun and Bradstreet agencies 
had very complete and reliable credit in- 
formation on all the Mexican merchants. 
He assured Americans that they would be 
cordially received and given every possible 
help. 



After leaving Saltillo our train headed 
for the border and we arrived in San An- 
tonio the afternoon of October 30th. 

I shall endeavor below to make a short 
summary of the general conditions in Mex- 
ico at present. 

POLITICAL 

Since Provisional President de la Huerta 
has been in office things have been very 
quiet and indications are that they are 
through with fighting. This belief is held 
by both natives and foreigners who are 
close students of conditions. President- 
elect Obregon will take the oath of office 
at midnight November 30. He seems to be 
very popular in all sections. Of course, one 
hears occasional criticisms of him, but the 
great majority seem to think he is capable 
of dealing with the situation. He is appar- 
ently very friendly toward America, as evi- 
denced by his many friendly utterances 
during his recent visit to Texas. The 
American in Mexico is very anxious to have 
the Mexican Government recognized by 
Washington and feels that this will greatly 
help the situation. The Democratic admin- 
istration of the United States is apparently 
very unpopular in Mexico, and, generally 
speaking, Harding rather than Cox was their 

20 



MEXICO TODAY 



choice for President. Practically all of the 
South American countries have recognized 
the present government. It is unofficially 
stated that there will be some cabinet 
changes when Obregon takes office, but one 
guess appears to be as good as another along 
this line. 

Francisco Villa seems to concur in the 
peace program, as he has become a quiet, 
peaceful farmer and the general opinion is 
that he will remain so. During our tour of 
the country we met the Governors of al- 
most every State we passed through and 
most of them seemed to be high class men. 
Elections are being held all over the coun- 
try and the better class of Mexicans are 
again stepping into politics. One of the 
causes of the recent trouble there was the 
fact that the high offices were taken by the 
lower class and the military, but now the 
people say they are tired of this sort of 
thing. 

In the past there has been quite a lot of 
complaint about the American Consular 
service. It is claimed the Consuls have not 
been carefully selected and in many in- 
stances men of questionable character have 
been appointed who are reported to have 
entered into shady business dealings in- 
stead of looking after the interests of their 
country. There are a number of fine Amer- 
ican Consuls in Mexico, but there have 
been certain men appointed who did not 
reflect credit on our Nation. In Mexico, 
as elsewhere, you will find renegade Ameri- 
cans who stir up quite a bit of trouble, but 
the representative American business men 
there are making it hot for these trouble 
makers. 

While in certain districts the attitude of 
the uneducated peon may be more or less 
unfriendly to the United States, the repre- 
sentative Mexican business men and poli- 
ticians now realize that our friendship is sin- 
cere and they stand ready to receive us in 
the most cordial manner. The political 
outlook is unquestionably brighter now than 
at any time during the past ten years. 

21 ^ 



MEXICO TODAY 



Americans can travel in safety and large 
numbers are now returning to the country. 

FINANCIAL. 

While the Government is having hard 
sledding at present, Mexico is by no means 
a bankrupt nation. It has already demon- 
strated how quickly it can begin to "come 
back." If it were not naturally one of the 
richest countries in the world they would 
have starved to death long ago. Their 
financial condition is improving daily and 
they get an enormous revenue from the oil 
fields and the railroads alone. As stated, 
Mexico is handicapped by a lack of good, 
strong banks. The interest rates charged 
by the present banks range from 12 to 36 
per cent per annum. The average i-ate for 
the Republic would probably be from 18 
to 24 per cent. This sounds imreasonable, 
but it is explained that owing to the un- 
settled conditions which existed in Mexico 
during the period of revolution the lo- 
cal banks feared to keep much of their 
capital and deposits in the country where 
it might be stolen or confiscated and there- 
fore kept approximately 60 or 70 per cent 
of their money in banks in the States. This 
only left them about 30 per cent to work 
with and they consequently had to charge 
a very high rate of interest to make a profit- 
able return. Also the fact that they keep 
two sets of books, one in American dollars 
and one in Mexican gold, makes their over- 
head expense abnormally large. Now, how- 
ever, as conditions settle down, they are 
bringing back to Mexico more of their 
funds. 

Mexico is on a gold basis. There is no 
paper money in circulation. The only 
money is Mexican gold, silver and copper 
coins and quite a large amount of Ameri- 
can money, both gold and silver, with some 
U. S. currency. American money is readily 
accepted in all the larger towns at two for 
one. Of course at the banks where the 
large exchange operations are transacted 
the rate fluctuates slightly. 

The banks of Mexico City and Tampico 

' 22 



MEXICO TODAY 



clear practically all items drawn on every 
part of Mexico. There are several banks 
operating in Mexico with branches in the 
principal cities and with arrangements with 
some local merchant in the smaller town 
who acts as an agent for the bank in col- 
lecting items. 

Banking appears to offer one of the widest 
fields in Mexico, for provided the country 
has peace, there should be comparatively 
more money made in Mexico in the next 
ten years than in most any other country. 
There is also a great field for large import 
and export organizations to help finance 
some of the trade that is now developing. 
A concern of this character should realize 
very satisfactory returns on its investment. 

INDUSTRIAL, 

Mexico appears to have gone back to 
work. Her factories, mines, smelters, mills, 
oil industries, railroads, and in fact all 
lines of industry seem to be working full 
speed. There is an urgent local demand for 
all manufactured products and the people 
engaged in these enterprises appear to be 
making money. 

The railroads are being rapidly restored 
to their former usefulness. The roadbeds 
are in exceptionally good condition. The 
only evidence of destruction is the bridges 
which were blown up or burned and a large 
number of burned freight cars. The 
bridges have been repaired and the freight 
cars are being rapidly reconstructed. Ad- 
ditional equipment and rolling stock is need- 
ed. One feature that makes it hard for 
the Mexican importers is that all cars owned 
by American roads are placed under a heavy 
bond before they are allowed to cross the 
border. This, of course, ties up a large 
amount of Mexican money which could 
otherwise be used for buying additional mer- 
chandise. Action is being taken now toward 
having this feature eliminated. The Gov- 
ernment has inaugurated the following plan 
to get cars reconstructed : any Mexican 
concern which needs cars can, at its own 

23 



MEXICO TODAY 



expense, have these cars reconstructed and 
then have that particular car or cars for its 
own private use for a given period, usually 
one year. However, it must pay the rail- 
roads the usual charge for hauling these 
cars. The merchants are glad to do this 
and the majority of cars you see bear the 
caption : "This car reconstructed by John 
Doe & Company for its exclusive use until 

date." The Mexican Government does 

not wish to handicap enterprises by exces- 
sive tax burdens and assures business that it 
will receive generous consideration. The 
Government has recently designated Guay- 
mas, Salina Cruz and Puerto Mexico as 
"free ports." Merchandise for transport 
through Mexico en route for other foreign 
countries is not subject to interference by 
the Treasury Department or the Customs 
authorities. Under this decree raw material 
may be shipped into these ports and manu- 
factured and the finished article exported 
to other countries without the payment of 
duty. 

AGRICULTURAL. 

Agriculturally Mexico is still in its in- 
fancy. There are millions of acres of un- 
developed farming land that needs nothing 
except the plow and hoe to make it a veri- 
table garden. In addition there are vast 
sections of land subject to irrigation which, 
when developed and given water, will be 
very profitable indeed. 

At present there is a situation existing 
which is held by some to be unjust. The 
United States Government prohibits the im- 
portation of certain Mexican agricultural 
products, mainly tropical fruits, it being 
claimed that these products are infected with 
some destructive moths or worms. The 
growers in Mexico are very indignant about 
this as it has worked a great hardship on 
them and they say that it is purely a politi- 
cal move instigated by the California and 
Florida fruit growers to prevent competi- 
tion from Mexico. A number of disinter- 
ested Americans with whom I talked stated 
that the Mexican products prohibited were 

24 



MEXICO TODAY 



in no way defective or harmful. Mexico 
possesses practically every kind of soil and 
climate and farming should develop rapidly 
there since so large a number of soldiers 
have gone back to peaceful pursuits. 

SOCIAL AND RELIGIOUS CONDITIONS 

Mexico is a land of two extremes — very 
rich and very poor. The rich are well edu- 
cated, cultured and refined. Their children 
are educated either in the States or in 
Europe. On the other hand, the peon is the 
picture of poverty. One wonders how he 
manages to keep alive. He lives in dirty 
hovels and begging is a side profession of 
great numbers. Education is the solution 
of this problem and already improvement 
in this respect is noticeable. The writer 
lived in Mexico some eleven or twelve 
years ago and since that time they have 
made progress in point of education, in spite 
of their internal troubles, and now that they 
are at peace, their educational program 
should progress rapidly. When the peon 
has prepared himself through education to 
do better work and earn more money the 
great present barrier between the two 
classes will be materially reduced. 

Mexico is a land of cathedrals. The aver- 
age Mexican is a very devout Catholic. 
Some think that the fact that the people 
have to support so many churches, priests, 
etc., is one reason they are so poor, as the 
Mexican will give to his church even if he 
has to go hungry to do it. Several Prot- 
estant churches have been established in 
Mexico and are said to be increasing their 
membership. The Y. M. C. A. has entered 
Mexico and is doing a great work among the 
young men. 

There has been a movement started re- 
cently by the American Chamber of Com- 
merce of Mexico City to have American 
business houses who want to go after Mex- 
ican business help some deserving Mexican 
young man through a college education in 
some American school with the idea of in- 
stilling our methods and ideas in him so he 

25 



Mexico today 



can be a capable representative of an 
American concern in Mexico. A number 
of schools have endorsed the plan and a 
few business houses have Mexican young 
men now taking these courses. If carried 
out generally, this would be a good thing 
and these Mexicans, upon their return to 
their country, would do much toward bet- 
tering our relations with Mexico. 

GENERAL, SITUATION 

In summing up I would say that the eco- 
nomic situation is very much better than 
Americans generally think. We have not 
been given a true picture of conditions by 
the newspapers. Mexico has been through 
several years of internal disorder but has 
emerged remarkably free from the physical 
destruction one would imagine. The oil 
question which has caused so much worry 
bids fair to be settled and there is every 
indication that foreign capital will soon be- 
gin to flow into Mexico to develop the won- 
derful natural resources of the country. 

Mexico needs our manufactured products 
and our financial assistance. I believe the 
Mexicans are sincere in their desire to have 
us come and do business with them. I be- 
lieve the Mexican merchant desires to, and 
will, meet his obligations with reasonable 
promptness, and I believe further that the 
present and the incoming Government is 
very friendly to Americans and to American 
capital. 

Mexico presents possibly the most attrac- 
tive trade field in the world today and the 
United States is the logical nation to obtain 
the benefit of this trade. Prompt action 
is essential if major benefits are to be en- 
joyed. 

Respectfully submitted, 

W. H. MOSELEY, Jr. 

Nov. 8, 1920. 



26 



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THE 

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Capital and Surplus $10,000,000 

(Est^bllabecl 1S3S) 
128 BROADWAY NEW YORK 



The American Exchange 
National Bank 

New York City 
LEWIS L. CLARKE 

President 



WALTER H. BENNETT 

Vice-President 

THEODORE H. BANKS 

Vice-President 

GEORGE C. HAIGH 

Vice-President 



LOUIS S. TIEMANN 

Vice-President 

MERCER P. MOSELEY 

Vice-President 

WILLIAM P. MALBURN 

Vice-President 



THOMAS L. ROBINSON 

Vice-President 

ARTHUR P. LEE 

Cashier 



A. K. de GUISCARD 

Asst. Cashier 

HUGH S. McCLURE 

Asst. Cashier 

WALTER B. TALLMAN 

Asst. Cashier 

ALEX. G. ARMSTRONG 

Asst. Cashier 

ROY MURCHIE 

Asst. Cashier 

ARTHUR D. BRIGHT 

Asst. Cashier 

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Asst. Cashier 

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Asst . Cashier 

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Directors 



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Royal Dutch-Shell Cos. 

THEODORE H. BANKS 

Vice-President 

Director, The Pacific Bank 

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President, Adams Express Co. 

WALTER H. BENNETT 

Vite- President 

Director, The Pacific Bank 

H. C BLACKISTON 

Dir., Furnws, Withy & Co., Ltd. 
and Prince Line, Ltd. 

ORION H. CHENEY 

Pres., Pacific Bank of New York 

LEWIS L. CLARKE 

President 

Director, The Pacific Bank 

R. FULTON CUTTING 

NewYork 

JOHN T. 

New 
Director, The 



WILLIAM P. DIXON 

Dixon & Holmes 

STEPHEN B. FLEMING 

Pres., Intern'] Agri. Corp. 

GEORGE LEGG 

New York 

Director, The Pacific Bank 

EDGAR J. NATHAN 

Cardozo & Nathan 

EDWARD C. PLATT 

Vice-President, Mackay Cos. 

JOSEPH A. SKINNER 

Wm. Skinner & Sons 

JAMES A. SMITH 

Calhoun, Robbins & Co. 
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TERRY 

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